BILL NUMBER: AB 2256	CHAPTERED  09/20/00

	CHAPTER   555
	FILED WITH SECRETARY OF STATE   SEPTEMBER 20, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 18, 2000
	PASSED THE SENATE   AUGUST 22, 2000
	PASSED THE ASSEMBLY   MAY 18, 2000
	AMENDED IN ASSEMBLY   MAY 1, 2000
	AMENDED IN ASSEMBLY   APRIL 4, 2000

INTRODUCED BY   Assembly Member Correa

                        FEBRUARY 24, 2000

   An act to amend Sections 18050.7 and 18070.3 of the Health and
Safety Code, relating to mobilehomes.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2256, Correa.  Licensing:  manufactured homes and mobilehomes.
   Under the existing Mobilehomes-Manufactured Housing Act of 1980,
the Department of Housing and Community Development is required to
enforce various laws pertaining to manufactured housing, mobilehomes,
park trailers, commercial coaches, special purpose commercial
coaches, and recreational vehicles.  The act also prohibits the
department from granting an initial dealer's license to any applicant
who has not met all of the specified education and experience
requirements.
   The bill would create a manufactured home or mobilehome dealer's
license, add alternative criteria for meeting the requirements of a
license, and raise the maximum payment from $40,000 to $75,000 that a
claimant, as defined, who has obtained a final judgment against any
manufactured home dealer, salesperson, or other seller or purchaser,
may receive from the Manufactured Home Recovery Fund for, among other
things, failure to honor warranties or guaranties, fraud, or willful
misrepresentation with respect to any one sales transaction on a new
or used manufactured home.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 18050.7 of the Health and Safety Code is
amended to read:
   18050.7.  In addition to any other requirements imposed by this
part or regulations of the department, the department shall not grant
an initial manufactured home or mobilehome dealer's license to any
applicant who has not satisfied all of the education and experience
requirements contained in this section.  If the applicant for a
manufactured home or mobilehome dealer's license is a partnership,
corporation, or other business entity, each person designated to
participate in the direction, control, or management of the sales
operation of the entity shall meet all of the education and
experience requirements contained in this section prior to issuance
of a manufactured home or mobilehome dealer's license by the
department.
   (a) The applicant either shall have held a valid manufactured home
or mobilehome salesperson's license issued by the department for at
least two years within the five-year period immediately preceding the
application for an initial manufactured home or mobilehome dealer's
license, or shall meet any of the following criteria:
   (1) Has acquired a four-year degree from an accredited college or
university.
   (2) Has held a valid manufactured home or mobilehome salesperson's
license issued by the department for one year in the past three
years and acquired an associate of arts or associate of science
degree from an accredited college.
   (3) Has been the officer of the corporation, owner or partner of,
or has held a management position relating to finance, marketing,
administration, or general management with, a manufacturer of
manufactured housing in any state for two years within the five years
immediately preceding application for an initial manufactured home
or mobilehome dealer's license.
   (4) Holds a management position with a housing authority,
redevelopment agency, or nonprofit housing corporation which is
developing individual lots, a subdivision, or a park for the
placement of manufactured homes or mobilehomes.
   (5) Has been an escrow, title, or loan officer of a land title
company, bank, savings and loan association, or mortgage company in a
capacity directly related to financing or conveying title to
manufactured housing for two years within the five years immediately
preceding application for an initial manufactured home or mobilehome
dealer's license.
   (6) Has been a subdivider, developer, or contractor in any state
for at least two years within the five years immediately preceding
application for an initial manufactured home or mobilehome dealer's
license, during which time the applicant developed or sold 10 lots or
the equivalent.
   (7) Has been the officer of a corporation, the owner or partner of
a mobilehome park or mobilehome park management company in any state
for at least two years within the five years immediately preceding
the application for an initial manufactured home or mobilehome dealer'
s license.
   (8) Has held a manufactured home or mobilehome dealer's license
from a state other than California for at least four years within the
five years immediately preceding the application for an initial
manufactured home or mobilehome dealer's license, and has completed
24 hours of continuing education class in California, in addition to
the preliminary education requirement of subdivision (b).
   (9) Has previously held a valid manufactured home or mobilehome
dealer's license issued by the department, or was a person designated
to participate in the direction, control, or management of the sales
operations of a partnership, corporation, or other business entity
that previously held a valid manufactured home or mobilehome dealer's
license issued by the department and the license has never been
revoked for cause, and never reissued, or suspended for cause and the
terms of suspension have not been fulfilled.
   (10) Has any combination of the above experience that would
provide at least two years of experience within the five years
immediately preceding the application for an initial manufactured
home or mobilehome dealer's license.  The two years of experience
shall not be concurrent.
   (b) The applicant shall have met the applicable preliminary
education requirements for the manufactured home or mobilehome dealer'
s license under paragraph (5) of subdivision (b) of Section 18056.2.

   (c) The department may adopt regulations, as necessary, to
implement this section.
  SEC. 2.  Section 18070.3 of the Health and Safety Code is amended
to read:
   18070.3.  (a) When any person (1) who has purchased a manufactured
home for a personal or family residential or investment purpose or
(2) who has sold a manufactured home for a personal or family
residential or investment purpose, obtains a final judgment in any
court of competent jurisdiction against any manufactured home dealer,
salesperson, or other seller or purchaser, and the judgment is based
on the grounds of failure to honor warranties or guarantees, or for
fraud, or for willful misrepresentation of the kind or quality of the
product sold or purchased, or for conversion, arising directly out
of any transaction which occurs on or after January 1, 1985, the
person, upon termination of all proceedings, including appeals, may
file a claim with the department for an order directing payment out
of the fund of the amount of actual and direct loss in the
transaction.
   (b) If any person either purchases a manufactured home used for a
personal or family residential or investment purpose from, or sells a
manufactured home used for a personal or family residential or
investment purpose to, a licensee who is or has been the subject of a
bankruptcy proceeding, the person may file a claim with the
department for an order directing payment out of the fund of the
actual and direct loss in the transaction based on the licensee's
failure to honor warranties or guarantees, or for fraud, or for
willful misrepresentation of the kind or quality of product purchased
or sold, or for conversion, arising directly out of any transaction
that occurs on or after January 1, 1985.
   (c) No person applying for recovery from the fund shall apply for
judgment on any bond issued prior to January 1, 1985.
   (d) "Actual and direct loss," for purposes of this chapter,
includes:
   (1) The amount of the actual and direct loss, plus court costs and
reasonable attorney fees incurred in pursuit of the judgment, not to
exceed 15 percent of the amount of the judgment, if the claim is
based on a judgment.
   (2) Only the amount of the actual and direct loss, if the claim is
not based on a judgment.
   (e) (1) The total amount of the claim shall not exceed the amount
of actual and direct loss that remains unreimbursed from any source.

   (2) The maximum payment ordered under this section, with respect
to any one sales transaction on a new or used manufactured home,
shall be the amount of the judgment plus attorney's fees or, in the
case of a bankrupt licensee, the amount of the actual and direct
loss, as determined by the department based on information in the
possession of the department and information provided by the claimant
or claimants.  In no event shall the actual payments exceed
seventy-five thousand dollars (75,000).
   (3) Notwithstanding any other provision of this chapter, a person
who purchases or sells a manufactured home for an investment purpose
may receive payment from the fund for that purpose only once.  A
person who has received payment from the fund for the purchase or
sale of a manufactured home for an investment purpose shall
henceforth be ineligible to make a claim under this chapter, either
as a natural person or as a member of a partnership, as an officer or
director of a corporation, as a member of a marital community, or in
any other capacity.
   (f) For the purposes of this chapter:
   (1) "Claimant" does not include a person holding a lien on, or a
person possessing a secondary interest in, a manufactured home.
   (2) "Conversion" means the unlawful appropriation of the property
of another.
   (g) Prior to payment of any claim against the fund, the claimant
or claimants shall have first:
   (1) If the claim is based on a final judgment, executed judgment
against all the assets of the judgment debtor or presented evidence
satisfactory to the department that the debtor is judgment proof.
   (2) If the claim is not based on a final judgment, presented
evidence satisfactory to the department that the licensee is or has
been the subject of bankruptcy proceedings and, for purposes of any
civil litigation or claims in bankruptcy proceedings, has assigned to
the department any interest in the actual and direct loss described
in subdivision (d) in the amount that the claimant or claimants
recover from the fund.
   (h) A claim against the fund shall be filed with the department in
accordance with the following:
   (1) If the claim is based on a final judgment, within one year
from the date of the judgment.
   (2) If the claim is not based on a final judgment, within one year
from the termination of bankruptcy proceedings or one year from the
date of sale as determined by subdivision (a) of Section 18070.2,
whichever event occurs later.
   (i) When any person files a claim for an order directing payment
from the fund, the department shall conduct a review of the
application and other pertinent information in its possession, and it
may issue an order directing payment out of the fund as provided in
subdivisions (a) to (h), inclusive, subject to the limitations of
subdivisions (a) to (h), inclusive, if the claimant or claimants show
all of the following:
   (1) That he or she is not a spouse of the judgment debtor, the
bankrupt licensee, or a person representing the spouse.
   (2) That he or she is making an application within the time
specified in subdivision (h).
   (3) That the claimant has satisfied the applicable requirements of
subdivision (g).
   (4) That, if the claimant is a seller of a manufactured home used
by the seller for personal, family, or household purposes, the
claimant made a good faith effort to adequately secure the debt
resulting from the sale of the manufactured home and with respect to
which the claim is made.  For purposes of this paragraph, a good
faith effort to secure the debt may be demonstrated by, but shall not
be limited to, providing the department with a promissory note
signed by the debtor and which, pursuant to the terms thereof, is
secured by collateral with a reasonable value at least equal to the
debt evidenced by the promissory note.
   (j) Upon an order of the department directing that payment be made
out of the fund, the Controller is authorized to draw a warrant for
the payment of the amount of the claim approved by the department
pursuant to this section.
   (k) In dispersing moneys from the fund, the department is
authorized to give priority to claimants who have attempted to
purchase or sell a manufactured home for a personal or family
residential purpose.
   (l) Prior to July 1, 1995, the department shall completely process
and render determinations upon all claims to the fund that were
received by the department prior to January 1, 1993.  All claims to
the fund that are received on or after January 1, 1993, shall be
processed, and a determination made, within one year of the original
date of application.
   (m) The department, upon request by a Member of the Legislature,
shall provide the following information:  the number of claims to the
fund, number of claims processed and decided within one year of
their application date, the amount of fund money paid to claimants,
and the amount of fund money allocated for the department's costs.
